SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.
LITIGATION RELEASE NO. 16007 / December 21, 1998
SECURITIES AND EXCHANGE COMMISSION v. JACK D. SEIBALD,
BERNHARD SEIBALD, STEWART R. SPECTOR, and ERIC S. FESSLER,
Defendants, and FRON CAPITAL CORPORATION and DEKALB
HOLDINGS, INC., Relief Defendants, Civil Action No. 95 Civ.
2081 (LLS) (S.D.N.Y.)
On December 14, 1998, the U.S. District Court for the
Southern District of New York signed a final judgment in the
Commission's insider trading case against Jack D. Seibald,
Bernhard Seibald, and Stewart R. Spector. Without admitting
or denying the Commission's allegations against them, the
defendants consented to the final judgment, which orders
Jack Seibald to pay disgorgement of $62,147.27, prejudgment
interest of $57,267.55, and a civil penalty of $127,067.05;
Bernhard Seibald to pay disgorgement of $9,712.24,
prejudgment interest of $8,949.63, and a civil penalty of
$9,712.24; and Stewart Spector to pay disgorgement of
$21,932.37, prejudgment interest of $20,210.25, and a civil
penalty of $21,932.37. As part of the settlement, the case
was dismissed as to the two relief defendants, Fron Capital
Corporation and DeKalb Holdings, Inc.
In its complaint, filed on March 28, 1995, the
Commission alleged that Jack Seibald, while employed as an
equity research analyst at Salomon Brothers Inc. in 1990 and
1991, obtained material, nonpublic information relating to
public companies he followed and unlawfully conveyed such
information to his brother Bernard, his father-in-law
Stewart Spector, his friend Eric Fessler, and the chief
financial officer of one of the public companies he
followed. The Complaint further alleged that after
receiving such information from Jack Seibald, these
individuals unlawfully traded in the securities of the
subject companies for their own accounts and, in the case of
Bernhard Seibald and Stewart Spector, for the accounts of
the releif defendants Fron and DeKalb, whose beneficial
owners were related to the Seibalds. Fessler settled the
case when it was filed (see Litigatoin Release No. 14449),
and the chief financial officer settled in a separate action
filed shortly before this one (see Litigation Release No.
14445).
The Commission acknowleges the assistance and
cooperation of the National Association of Securities
Dealers and the New York Stock Exchange in connection with
its investigation of this matter.